While our private sector goes from strength to strength (primarily because of sensible incentives, not because the players are inherently honest), our state sector suffers. Most private offices you walk into are world-class facilities, comparable to the best in the world. Every government-managed road you drive on is worse than the roads of sub-Saharan Africa. Clearly this is because we have the wrong incentives in place. Can the situation change such that the concerned actors get rewarded for building good quality roads, water works, sewage plants and parks and for building them in months, not in decades? How can we align the interests of contractors, civil servants and elected officials such that they escape from their equivalent albatrosses of high taxes and estate duties? How can we make it ‘profitable’ for them to deliver quality public goods in a timely manner? If we crack this, we reduce corruption and improve their performance as we have done with our erstwhile immoral promoters.

Over the years, we have developed excellent think-tanks in Public Policy. The Centre for Policy Research is a good example. As a result, we have a broad consensus on policy issues. Everyone is agreed that inclusive growth is a must. Leaving the majority of the country abysmally poor (in absolute, not just relative terms) is morally obnoxious; those who are not troubled by morals will relate to the fact that a large sullen underclass represents a danger to private prosperity inside high-rises or gated communities. Besides it is an entirely avoidable tragedy to have a nice home (with world class audio and video equipment) and then to have to step out on to pot-holed garbage dumps that pass for roads. We know the answers in policy terms. We need better roads, better sanitation, water supply and public health facilities. We need better and more accessible education for larger numbers of people. We also know that mere increase in public expenditure is not the solution. This only enriches crooked contractors and their accomplices within state institutions. It does not improve our public spaces or help our poor. What we need is more effective public expenditure.

... contd.